Under a DACA amnesty, American taxpayers would be left with a $26 billion bill. About one in five DACA illegal aliens, after an amnesty, would end up on food stamps, while at least one in seven would go on Medicaid. Since DACA’s inception under Obama, more than 2,100 illegal aliens have been kicked off the program after it was revealed that they were either criminals or gang members. JOHN BINDER

Friday, January 15, 2016

THE DEMOCRAT PARTY'S WAR ON THE AMERICAN MIDDLE CLASS CONTINUES IN FLINT

The conditions in Flint and Detroit reveal the reality behind the
Obama administration’s claims of an “economic recovery” in America’s
manufacturing cities, and the triumphal assertions by politicians and
the media that the bankruptcy of Detroit—which sold off city assets to
speculators and slashed the pensions of municipal workers and
retirees—has brought about an economic turnaround.

Flint, Michigan: Portrait of an American city

15 January 2016

On Wednesday, just one day after Michigan Governor Rick Snyder
mobilized the National Guard in response to the drinking water crisis in
Flint, Michigan, he was forced to admit that ten Flint residents had
died as a result of an outbreak of Legionnaires’ disease likely linked
to the city’s contaminated drinking water.

Those deaths are in addition to the 9,000 children likely to have
been put at risk for lead poisoning. Even small exposures of children to
lead can permanently lower intelligence and academic achievement, and
the effects cannot be corrected.

The city’s spiraling public health disaster is the result of its move
in April 2014 to draw its drinking water from the Flint River, after
the Detroit water department demanded higher rates in the aftermath of
the Detroit bankruptcy. The Flint River, having been used as a dumping
ground for chemicals by local industry for decades, was widely known to
be polluted, but state-appointed Emergency Manager Darnell Earley argued
that a cost savings of $5 million over two years—to be passed on to the
city’s creditors on Wall Street—justified the move.

The city’s political establishment hailed the decision and the
emergency manager and local Democratic Party officials declared that the
water was safe in the face of mounting protests by residents.
Throughout early 2015, city officials even falsified the results of
tapwater tests in order to downplay the presence of lead.

On Tuesday, the Detroit News reported that the US
Environmental Protection Agency had indications as early as February
that drinking water in the city of Flint was contaminated, but took no
action to inform the population, even as state and local officials
sought to publicly reassure residents that the water was safe to drink.

Snyder’s admission of the outbreak of Legionnaires’ disease was made
the day after President Obama gave a State of the Union address in which
he declared, ritualistically, that “the state of our union is strong.”
He bragged, “our auto industry just had its best year ever,” as part of a
“manufacturing surge” that had led the United States to “recover from
the worst economic crisis in generations.”

A look at Flint, the birthplace of General Motors, tells a different
tale. In 1978, the city employed 80,000 autoworkers. Today, this figure
stands at about 5,000. Flint has an official poverty rate of 40.1
percent, making it the second-most poverty-stricken city of its size in
America, behind Youngstown, Ohio, another former icon of American
industry.

A staggering two-thirds of the city’s children live in poverty, 10
percentage points higher than Detroit, America’s poorest large city. To
an extent even greater than Detroit, the city’s population has dwindled
and most of its historic buildings have either been demolished or stand
vacant.

Even as government officials were forced to admit the scale of the
disaster taking place in Flint, teachers in Detroit were engaged in a
mass sick-out in defiance of their union that closed 60 schools,
protesting dismal school conditions that left buildings covered in
dangerous mold with huge gaps in flooring and no heat.

The conditions in Flint and Detroit reveal the reality behind the
Obama administration’s claims of an “economic recovery” in America’s
manufacturing cities, and the triumphal assertions by politicians and
the media that the bankruptcy of Detroit—which sold off city assets to
speculators and slashed the pensions of municipal workers and
retirees—has brought about an economic turnaround.

In fact, the desperate conditions in Flint and Detroit are a
microcosm of the social disaster that has been imposed on the American
working class by decades of deindustrialization, mass layoffs and
attacks on workers’ living standards.

Even as he sought to present an absurdly positive picture of social
relations in America, Obama was forced to acknowledge the growth of
poverty and social inequality, while attributing it to inexorable
technological changes that resulted in workers having “less leverage for
a raise.”

In reality, the horrific growth of poverty and social misery in
cities such as Flint is the result of the class policies of the ruling
elite, imposed by both parties and rubber-stamped by the trade unions
and the Democratic politicians who have run cities such as Detroit,
Flint, Baltimore and Chicago.

Every step in the destruction of Flint has taken place with the seal
of approval of the unions, beginning with the wave of auto plant
closings in the early 1980s which the unions said were necessary to
improve the profitability of the automakers and the long-term prospects
of autoworkers.
Three decades later, responding to the move in April 2014 to begin
using water from the polluted Flint River, AFSCME Local 1600 president
Sam Muma declared, “This is a good thing for the community. It will
provide jobs” and make the city “self-sufficient.” Flint’s director of
public works, Howard Croft, an African-American Democrat, declared that
the move “marks the beginning of the new narrative of the city of
Flint,” while Democratic Mayor Dayne Walling praised the decision as “an
important day for us.”

These minor henchmen of the American financial elite have made their
livelihoods peddling policies that have destroyed the lives of countless
millions of families, led to hundreds of thousands of early deaths, and
turned America into a country where most households are so poor they do
not have enough cash to cover a $500 emergency expense.

The conscious policy of deindustrialization begun in the late 1970s,
which reduced cities throughout the country to rubble, was aimed at
extracting trillions of dollars from American workers by slashing wages,
raiding pensions and selling off assets. But more than pure greed was
involved in these sociopathic measures. Flint was the scene of the
powerful sit-down strike of 1936-37 and a symbol of the independent
strength of the American working class. Its destruction was a form of
cruel vengeance extracted by the ruling elite.

Legend has it that when the ancient Romans sacked the city of
Carthage, in addition to razing it to the ground, they salted the earth
so that nothing would grow there again. This was done as retaliation for
the defeats they had suffered at the hands of their great enemy,
Hannibal.

That story, describing the actions of a people who were among the
cruelest in history, is as far as we can tell not true. But the American
ruling class, filled with bitter hatred of the workers of Flint, not
only reduced the city’s factories to rubble and its children to poverty,
but poisoned its water supply.
The disaster in Flint reveals the nature of the sociopaths and
murderers among America’s billionaire financial oligarchs and their
hired politicians and functionaries. The only way to reverse the decades
of social destruction that they have wrought, and ensure a decent life
for America’s workers, is to confiscate the ill-gotten billions of the
financial oligarchy, seize the major corporations, and reorganize
society on a socialist basis.

Wave of selling hits US markets

By Nick Beams 14 January 2016

US
stocks markets tumbled Wednesday as oil prices continued to fall and
voices in the finance industry, together with economic commentators,
warned of the potential for a major crisis.

The
sell-off was across the board, the Dow falling by 365 points, 2.21
percent, the S&P 500 by 2.50 percent and the Nasdaq down by 3.4
percent. The day opened with an uptick but large-volume selling soon set
in, the prevailing sentiment being that it was necessary to get out
without waiting to see what would happen during the rest of the day.

Commentators
said the sell-off was not just about oil, which has been touching
levels as low as $30 per barrel, but the fall in prices for all
industrial raw materials induced by the slowdown in China.
The
sharp downturn has come in the wake of a series of assessments by
banking officials that the conditions for a new financial crisis are
fast developing.

On Tuesday economists at the Royal
Bank of Scotland issued an assessment that said investors faced a
“cataclysmic year” in which stocks could fall by 20 percent and oil
could go as low as $16 per barrel.

In a note to
clients, the RBS said: “Sell everything except high quality bonds. This
is about return of capital, not return on capital. In a crowded hall,
exit doors are small.” It warned that the present situation recalled
2008 when the collapse of Lehman Brothers set off a global crisis. This
time the trigger could be China.

The bank’s credit
chief Andrew Roberts said China had set off a “major correction and it
is going to snowball” with equities and credit becoming “very
dangerous.” He warned that the London market was particularly vulnerable
to a negative shock because of the large number of commodity companies
in the UK. The prices of all industrial raw materials, not just oil, are
moving sharply down, reaching lows not seen since the immediate
aftermath of the financial crisis.

“All those people
who are long [buyers of] oil and mining companies thinking that the
dividends are safe are going to discover than they’re not at all safe,”
Roberts said.

RBS’s prediction of a sharply lower oil
price was matched by Morgan Stanley which said it could go to $20 per
barrel. Standard Charter forecast an even bigger fall, to $10. “Given
that no fundamental relationship is driving the oil market toward any
equilibrium, prices are being moved almost entirely by financial flows
caused by fluctuations in other asset prices, including the US dollar
and equity markets. We think prices could fall as low as $10 per
barrel.”

The Standard Chartered analysis points to the
development of a vicious circle: a falling oil price sends down equity
markets and then financial flow-on effects from the decline in stock
prices lead to a further drop in the price of oil.

Following the RBS call to “sell everything,” the Guardian
sought responses from a series of economists. While none went as far as
the RBS, there was a distinct lack of confidence in their replies.

Erik
Britton, director of Fathom Consulting, did not dispute that China
would have a “hard landing.” He said it was headed for just 2 percent
growth in gross domestic product, markedly less than the official
government prediction of 6.5 percent for this year.

Jonathan
Porter, the director of the National Institute for Economic and Social
Research, said he was “worried” by current events “but not yet
panicked.”

“But if the current concerns turn into a systematic meltdown on financial markets, then all bets are off,” he added.

Chris
Williamson, the chief economist at the financial data provider Markit,
said the worry was that the RBS warning could become a self-fulfilling
prophecy and if a financial market rout led to a new recession,
“policymakers are seriously lacking in tools to fight the new downturn.”

The
RBS assessment was echoed by comments on Wednesday from Albert Edwards,
strategist at the Societe Generale bank, who has long held the belief
that equity markets are considerably over-valued. He said the West was
about to be hit by a wave of deflation from emerging market economies
and central banks were not aware of what was about to hit them.

He
told an investment conference in London that developments in the global
economy would “push the US back into recession. The financial crisis
will reawaken. It will be every bit as bad as in 2008–09 and it will
turn very ugly indeed.”

The US economy was in much
worse shape than the Fed realised, with the US corporate sector being
“crushed” by the appreciation in the value of the dollar. “We have seen
massive credit expansion in the US. This is not for real economic
activity; it is borrowing to finance share buybacks,” he said.
In
an assessment of the significance of the fall in the markets, which in
the US have experienced their worst new year opening in history, an
article in the Financial Times on Monday pointed to longer-term
trends. In the wake of the financial crisis, “aggressive easing” by the
Fed and other central banks, coupled with a “mammoth spending binge” by
China, had suppressed market volatility for an extended period and
created a tide that lifted global assets prices.

“Now
that liquidity is draining away and the bill for China’s spending—in the
shape of overcapacity in some industries and high levels of
indebtedness—is coming due,” the article noted.

“The
worrying signal from the current turmoil is that the investor herd truly
has become fearful and thinks the financial system is broken. Namely,
that quantitative easing has merely papered over the cracks of global
economic imbalances, borrowed hefty investment gains from the future and
left taxpayers and company bondholders with a massive rise in
outstanding debt.”

International Monetary Fund managing
director Christine Lagarde also pointed to longer-term trends in a
speech delivered in Paris on Tuesday. She said emerging market economies
were facing a “new reality” in which their growth rates would be
significantly slowed.

“Growth rates are down, and cyclical and structural forces have undermined the traditional growth paradigm,” she said.

That
paradigm was based on boosting exports and attracting capital inflows.
On current forecasts, she said emerging economies would move towards
advanced economy incomes at less than two-thirds the pace predicted by
the IMF a decade ago. “This is cause for concern,” she said.

The
World Bank last week warned that these economies faced difficulties in
2016 after growing last year at their slowest pace since the financial
crisis of 2008.

Lagarde said the shift by the Fed
towards ending its easy monetary policies, together with the
continuation of these policies by other central banks, had the potential
to trigger exchange rate ructions.

“This volatility
could be induced not only by the divergence in monetary policies in
major advanced economies, but also by uncertainty about their overall
prospects and policy action.”
In an indication of the deepening
recessionary trends in the global economy, she noted that oil and metal
prices were down by two-thirds from their peak and were likely “to stay
low for a sustained period,” placing several developing economies “under
severe stress.”
That stress is already in evidence with major
economic contractions in Brazil and Russia, but it is not confined
there. The economic outlook for two developed commodity-exporting
countries, Australia and Canada, is also worsening.
Former US
treasury secretary Lawrence Summers added his voice to those warning
about the state of the global economy in a comment published in the Financial Times
on Monday. He said that while markets do sometimes send out false
alarms, economic and financial authorities should take notice because
“the conventional wisdom never recognises gathering storms.”
“Because
of China’s scale, its potential volatility and the limited room for
conventional monetary manoeuvres, the global risk to domestic economic
performance in the US, Europe and many emerging markets is as great as
at any time I can remember,” he wrote.
It is impossible to predict exactly how the present turmoil will play out. But two certainties have been established.
Firstly,
that the 2008 financial crisis was only the beginning of a breakdown of
the global capitalist economy, for which the ruling elites have no
economic solution. In fact, their actions have only created further
wealth for the ultra-rich, increasing social inequality, while setting
up the conditions for another financial meltdown.
And finally,
that the renewed turbulence is going to produce even deeper attacks on
the working class which, on top on those already being implemented, will
bring an upsurge in social and political struggles.

"The result: 95 percent of all income gains during the Obama presidency going to the richest 1 percent of households!"

Obama’s State of the Union address and the breakdown of American democracy

14 January 2016

“In our time, political speech
and writing are largely the defense of the indefensible. Things like
the continuance of British rule in India, the Russian purges and
deportations, the dropping of the atom bombs on Japan can indeed be
defended, but only by arguments which are too brutal for most people to
face, and which do not square with the professed aims of the political
parties. Thus political language has to consist largely of euphemism…A
mass of Latin words falls upon the facts like soft snow, blurring the
outline and covering up all the details.”

George Orwell in “Politics and the English Language,” 1946
**
The
final State of the Union address given by President Barack Obama on
Tuesday night was a litany of lies, banalities and military threats. The
speech underscored the inability of the American political
establishment to honestly address a single social question facing the
broad masses of the population.
The address was generally
praised by the media as a statement of confidence in America’s future.
In fact, it combined bluster about the strength of the US economy
absurdly at odds with economic and social reality with self-praise for
“taking out” the enemies of American imperialism and assurances of more
military havoc to come.

To
the extent that Obama touched in passing on the growth of social
inequality, the ever greater domination of the corporate-financial
elite, falling wages and rising poverty, these pervasive features of
social life in America were ascribed to cosmic forces of “change”
entirely disconnected from government policies in general and those
pursued by his administration in particular over the past seven years.

There
is an objective significance to the reduction of the State of the Union
address, an American political tradition that goes back to George
Washington, to an empty and cynical media spectacle. This process did
not begin with Obama. It has been underway for decades, in parallel with
the ever further turn of the ruling elite and both big business parties
to the right and the widening chasm between the entire political system
and the broad mass of working people.

While there was
never a golden age of American bourgeois politics, the annual State of
the Union address before a joint session of Congress once had a certain
democratic content. There was a time when the president in the form of
this speech sought to make a sober assessment of the actual state of the
nation’s economic, political and social life and the condition of its
relations with other nations. It was both a means of internal
communication within ruling circles and a report to the broader
population.

In Abraham Lincoln’s December 1862 message
to Congress, the Great Emancipator spoke in favor of abolition.
“Fellow-citizens,” he declared, “we cannot escape history… In giving
freedom to the slave we assure freedom to the free and honorable alike
in what we give and what we preserve. We shall nobly save or meanly lose
the last best hope of earth.”

In a later period,
Franklin D. Roosevelt pledged a “Second Bill of Rights” that would
include provisions ensuring “freedom from want.” (The proposal was a
dead letter almost as soon as it was made.) In 1963, John F. Kennedy
cautioned that “the mere absence of war is not peace.”

Even
some of the more reactionary presidents of an earlier period could
seriously acknowledge the existence of social problems. In 1922, Warren
G. Harding began his State of the Union address by declaring, “So many
problems are calling for solution that a recital of all of them, in the
face of the known limitations of a short session of Congress, would seem
to lack sincerity of purpose.”

The
immense growth of social inequality in parallel with the dismantling of
much of US industry, the decline in the global economic position of
American capitalism and the increasing domination of a parasitic and
quasi-criminal financial elite have made any objective accounting of the
real “state of the union” a political impossibility. All those
in attendance Tuesday night were well aware that the important policy
decisions on both the domestic and international front are made neither
by the president nor Congress, but rather by the military brass, the
intelligence establishment and Wall Street. The same conviction is
growing within broad layers of the population who are increasingly
alienated from and disgusted by the entire political and economic
set-up.

Having come to power by posing as an opponent
of the war in Iraq and the militarism of the Bush years, Obama could
hardly make an honest assessment of his foreign policy, which has added
to the war in Afghanistan new wars in Libya, Syria and Iraq, an
expansion of drone assassinations and a policy of military provocation
against Russia and China that has brought the world closer to world war
than at any time since 1945.

A major part of his
address Tuesday was given over to boasting of America’s destructive
military power and his readiness to use it. Responding to his critics
among the Republican right, he proclaimed: “The United States of America
is the most powerful nation on Earth. Period. Period. It’s not even
close. It’s not even close. It’s not even close. We spend more on our
military than the next eight nations combined. Our troops are the finest
fighting force in the history of the world. No nation attacks us
directly, or our allies, because they know that’s the path to ruin.”

Having
posed as a critic of Bush’s anti-democratic buildup of the police
powers of the state in order to get elected, Obama was in no position to
discuss his expansion and institutionalization of police state measures
such as pervasive government spying; the jailing and persecution of
whistleblowers like Julian Assange, Chelsea Manning and Edward Snowden;
the shielding of the authors and organizers of torture programs; the
militarization of the police and defense of killer cops.

Among
the most blatant lies in Obama’s speech was the assertion, “For the
past seven years, our goal has been a growing economy that works better
for everybody.” Had Obama added “who counts” to the end of this sentence
he would have been closer to the truth.

Trillions
of dollars for the banks and speculators whose recklessness,
lawlessness and greed triggered the Wall Street crash and ensuing
depression, not a single “bankster” prosecuted in seven years—that on
one side. On the other, sweeping wage reductions for autoworkers imposed
by Obama’s “Auto Task Force,” and austerity, school closures, pension
cuts and attacks on health benefits for millions of working people under
“Obamacare.”

The result: 95 percent of all income gains during the Obama presidency going to the richest 1 percent of households!

In
what has become a hallmark of American political rhetoric, Obama
concluded his speech with sheer bathos: “I see [the voice of America] in
the worker on the assembly line who clocked extra shifts to keep his
company open, and the boss who pays him higher wages instead of laying
him off… The protester determined to prove that justice matters—and the
young cop walking the beat, treating everybody with respect, doing the
brave, quiet work of keeping us safe.”

A political
system that must resort to such stupid and transparent posturing is a
political system in terminal crisis. The mounting indignation and
militancy of the masses will seek new avenues of struggle outside of and
in opposition to the entire rotten edifice of official politics.

According
to a report by the National Association of Counties issued on the eve
of the State of the Union address, of the 3,069 counties in the United
States, 93 percent are worse off than before the 2008 financial crash
according to at least one of four economic indicators: total employment,
the unemployment rate, the size of the economy and home values.

Obama’s final State of the Union: Lies, evasions and threats

By Patrick Martin 13 January 2016

The
final State of the Union speech delivered Tuesday night by President
Barack Obama was a demonstration of the incapacity of the American
political system to deal honestly or seriously with a single social
question.

Obama evaded
the real issues that affect tens of millions of working people in
America every day of their lives. He painted a ludicrous picture of
economic recovery and social progress that insulted the intelligence of
his television audience—and went unchallenged by the millionaire
politicians assembled in the chamber of the House of Representatives.

Summing
up what he called “the progress of these past seven years,” Obama gave
first place to “how we recovered from the worst economic crisis in
generations.” The so-called “recovery” has been a bonanza for corporate
profits, stock prices, and the wealth and income of the super-rich. For
the working people who are the vast majority of the population, it has
been a disaster.

By most social indices,
the American people are worse off in January 2016 than when Obama took
office seven years ago. The real wages of working people have fallen,
social services have deteriorated, pension benefits have been gutted,
and cities such as Detroit and San Bernardino have been forced into
bankruptcy.

According
to a report by the National Association of Counties issued on the eve
of the State of the Union address, of the 3,069 counties in the United
States, 93 percent are worse off than before the 2008 financial crash
according to at least one of four economic indicators: total employment,
the unemployment rate, the size of the economy and home values.

In
27 states, not a single county has recovered fully from the 2008 crash
and the deep economic slump that followed. These include such major
states as Florida, Georgia, Illinois, Massachusetts, Missouri, New
Jersey, New York and Pennsylvania.

Obama, however,
painted a picture of nearly unblemished economic advance, declaring,
“The United States of America, right now, has the strongest, most
durable economy in the world.” He boasted, “We’re in the middle of the
longest streak of private-sector job creation in history. More than 14
million new jobs; the strongest two years of job growth since the ‘90s;
an unemployment rate cut in half.”

BLOG:
AS OBAMA AND THE DEMOCRAT PARTY SABOTAGE OUR BORDERS, E-VERIFY AND
REFUSE TO ENFORCE LAWS PROHIBITING THE EMPLOYMENT OF ILLEGALS!

The
president did not acknowledge that the post-2008 “recovery” is the
weakest on record, that the vast majority of the new jobs created have
been low-wage and many of them part-time, or that the drop in the
unemployment rate is primarily due to the withdrawal of millions of
people from the work force because they lost all hope of getting a
decent-paying job.

He went on, tellingly, to
cite the auto industry as a symbol of success, declaring that it “just
had its best year ever.” This perfectly expresses the utter blindness,
not just of Obama, but of the entire political establishment. The “best
year ever” was for General Motors, Ford and Fiat-Chrysler, which enjoyed
record profits, not for the auto workers who produced those profits.

Real
wages for auto workers have dropped sharply since the Obama White House
forced through a 50 percent cut in wages for all new hires as part of
the bankruptcy reorganization of the industry in 2009. Mass discontent
among auto workers was expressed at the end of 2015 in the rejection of
contracts at Fiat-Chrysler and Nexteer, a major supplier, and in
widespread demands for strike action, smothered by Obama’s stooges in
the United Auto Workers union.

“Anyone claiming that
America’s economy is in decline is peddling fiction,” Obama concluded.
The social position of the American working class has, in fact, suffered
a dramatic decline, through the combined efforts of the corporate
bosses, the unions and the two capitalist parties, the Democrats and
Republicans.

The president conceded that economic
inequality has grown in the United States, but he described it as the
outcome of long-term trends such as globalization and automation, as
though the policies of his administration—bailouts for Wall Street,
budget cuts and wage cuts for workers—had nothing to do with it.

In
the seven years since the financial crash, brought on, as he admitted,
by “recklessness on Wall Street,” not a single banker or speculator has
been prosecuted or jailed. On the contrary, the billionaires have
greatly increased their wealth, gobbling up 95 percent of all new income
since Obama entered the White House.

Obama
listed a few other policy “successes,” claiming that “we reformed our
health care system, and reinvented our energy sector… we delivered more
care and benefits to our troops and veterans.” He was referring,
however, to a series of social disasters: the reactionary attack on
health benefits for workers and their families known as Obamacare; the
devastation of Appalachia and other energy-producing regions; and the
abuse of ex-soldiers, wounded in body and mind, by the Veterans
Administration.

Obama sought to defend the foreign
policy record of his administration from criticism, mainly from the
Republican right, where demands are being raised for military escalation
in the Middle East and stepped-up attacks on democratic rights at home
in the name of fighting “terrorism.”

While he claimed
to reject an American role as the world’s policeman, he nonetheless
boasted, “The United States of America is the most powerful nation on
Earth. Period. It’s not even close. We spend more on our military than
the next eight nations combined.”

He continued, “Our
troops are the finest fighting force in the history of the world,”
winning the bipartisan standing ovation that always accompanies any
mention of American soldiers engaged in combat overseas.

Obama
indulged in the glorification of killing that has become an essential
part of the degraded spectacle that passes for political discourse in
America. Describing the US war against the Islamic State in Iraq and
Syria, he claimed, “With nearly 10,000 air strikes, we are taking out
their leadership, their oil, their training camps, and their weapons.”

He
called on Congress to pass an Authorization for the Use of Military
Force against ISIS, but vowed to wage war with or without legislative
approval. The leaders of ISIS, he proclaimed, “will learn the same
lessons as terrorists before them. If you doubt America’s commitment—or
mine—to see that justice is done, ask Osama bin Laden. Ask the leader of
al Qaeda in Yemen, who was taken out last year…”

Then
he declared, in language that will be noted by nations all over the
world, that when it comes to waging war against potential adversaries,
“our reach has no limit.”

Obama concluded his speech
with an appeal to his Republican opponents to work with his
administration and pull back from the extreme anti-immigrant and
anti-Muslim rhetoric that has characterized the contest for the
Republican presidential nomination.

In a clear
reference to Donald Trump, he argued that “we need to reject any
politics that targets people because of race or religion. This is not a
matter of political correctness, but understanding what makes us
strong.”

Obama was making an argument, not so much that
racism and bigotry are intrinsically wrong, but that they make it more
difficult for American imperialism to maintain its dominant world role.
“When a politician insults Muslims,” he said, “it makes it harder to
achieve our goals.”

The lottery and social despair in America

9 January 2015

This mania, so generally
condemned, has never been properly studied. No one has realized that it
is the opium of the poor. Did not the lottery, the mightiest fairy in
the world, work up magical hopes? The roll of the roulette wheel that
made the gamblers glimpse masses of gold and delights did not last
longer than a lightning flash; whereas the lottery spread the
magnificent blaze of lightning over five whole days. Where is the
social force today that, for forty sous, can make you happy for five
days and bestow on you—at least in fancy—all the delights that
civilization holds?
Balzac, La Rabouilleuse, 1842

The
jackpot in the US Powerball lottery has hit $800 million, since there
were no winners in Wednesday’s drawing. In the current round, which
began on December 2, over 431 million tickets have been sold, a figure
substantially larger than America’s population.
Go into any corner
store in America and you will see workers of every age and race waiting
in line to buy lottery tickets. With the current round, the lines are
longer than ever. Americans spend over $70 billion on lottery tickets
each year. In West Virginia, America’s second-poorest state, the average
person spent $658.46 on lottery tickets last year.
Powerball
players pick six random numbers when they purchase their tickets, with a
certain percentage of sales going to the jackpot. If no winning ticket
is sold, the jackpot rolls over to the next round.
The totals for
the Mega Millions and Powerball national lotteries have been growing
every year. This year’s jackpot has eclipsed 2012’s record of $656.5
million, the $390 million payout in 2007 and the $363 million prize in
2000. The jackpots have grown in direct proportion to ticket sales.
State-run
gambling programs such as Powerball have been promoted by Democrats
and Republicans alike as a solution to state budget shortfalls, even as
the politicians slash taxes on corporations and wealthy individuals
and gut social programs. From the standpoint of government revenue,
lotteries and casinos are nothing more than a back-door regressive tax,
soaking up money from the poor in proportion to the growth of social
misery.
The boom in lotteries is global. Lottery sales grew 9.9 percent worldwide in 2014, after growing 4.9 percent in 2013.
Psychology
Professor Kate Sweeny has noted that lottery sales grow when people
feel a lack of control over their lives, particularly over their
economic condition. “That feeling of self-control is very important to
psychological well-being,” Sweeny says.
There is ample reason for
American workers to feel they have no control over their lives.
According a recent survey by Bankrate.com, more than half of Americans
do not have enough cash to cover an unexpected expense of $500 or
more—roughly the price of four name-brand tires.
Some 62 percent
of Americans have savings of less than $1,000, and 21 percent do not
have any savings at all. Most Americans are one medical emergency or
one spell of unemployment from financial ruin.
For all the talk
about “economic recovery” by the White House, the real financial state
of most American households is far worse than before the 2008 financial
crisis and recession. As of 2013, Americans were almost 40 percent
poorer than they were in 2007, according to a recent survey by the Pew
Research Center. While a large portion of the decline in household
wealth is attributable to the collapse of the housing bubble, falling
wages and chronic mass unemployment have played major roles.
The
yearly income of a typical US household dropped by a massive 12
percent, or $6,400, in the six years between 2007 and 2013, according to
the Federal Reserve’s latest survey of consumer finances. A large share
of this decline has taken place during the so-called recovery presided
over by the Obama administration.
In addition to becoming poorer,
America has become much more economically polarized. According to a
separate Pew survey, for the first time in more than four decades
“middle-income households” no longer constitute the majority of
American society. Instead, the majority of households are either low-
or high-income. Pew called its findings “a demographic shift that could
signal a tipping point” in American society.
“Is the lottery the new American dream?” asked USA Today,
commenting on this month’s Powerball jackpot. The observation is truer
than the authors intended. For American workers, achieving the
“American Dream” of a stable job and one’s own home is becoming
increasingly unrealizable.
Following more than 10 million
foreclosures during the financial crisis, America’s home ownership rate
has hit the lowest level in two decades, and for young households, the
rate of home ownership is the lowest it has been since the 1960s.
For
the tens of millions of America’s poor, and the more than 100 million
on the threshold of poverty, the dream of winning the lottery has
replaced the “American Dream” of living a decent life. A lottery ticket
is a chance to escape to a fantasy world where money is not a
constant, nagging worry, where one is not insulted and bullied at a
low-wage job by bosses whose pay is matched only by their incompetence.
The lottery is, as Balzac aptly described it, the “opium of the poor.”
Using
the same phrase to describe religion, Marx noted that the “illusory
happiness of the people” provided by the solace of religion is, in
fact, a silent protest and distorted “demand for their real happiness.”
It is the intolerable social conditions that compel masses of people
to seek consolation in a lottery ticket that will propel them into
revolutionary struggles.
Andre Damon

Survey finds a majority of Americans unable to pay for major unexpected expenses

By Nick Barrickman 9 January 2016

A
new survey put out by the personal finance management site
Bankrate.com on Wednesday found that more than half of Americans could
not weather a sudden financial crisis without having to borrow money
from friends and family or being forced to reduce the amount spent on
other items such as dining out, paying cable or cell phone bills, or
other basic features of a “middle class” lifestyle.

The survey,
conducted last month among a pool of 1,000 Americans in conjunction
with Princeton Survey Research Associates International, found that only
37 percent of those surveyed would be able to pay an emergency expense
of $1,000, such as an emergency room visit or the cost of repairing a
broken down vehicle, out of pocket.

Sixty-three percent
of those surveyed would not be able to cover such a sudden expense
without either cutting down on expenses elsewhere, borrowing or
resorting to credit. The survey found that nearly four in 10 Americans
had suffered such a financial setback in 2015.

“Without
an adequate rainy-day fund, we are all living on a very slippery
financial slope,” Gail Cunningham of the National Foundation for Credit
Counseling told Bankrate.com. “The unexpected, unplanned expense is
going to rear its ugly head and usually at the most inopportune
time…Things as small as a flat tire or one trip to the emergency room
can wreck the budgets of those who do not have an adequate amount in
their savings account,” she said.

For Americans making
less than $30,000 per year, only 23 percent would be able to cover
such a sudden expense on their own. This was contrasted by nearly 60
percent of those making over $75,000 annually who could say the same.
Nine percent making $30,000 or below stated that they did not know how
they would cover such expenses, meaning that they were one expensive
setback away from personal financial ruin.

The poll
comes amid a slew of other reports detailing an immense drop in the
living standards of a significant section of the US population, a
component of the growth of social inequality more broadly.

Since
the 2008 financial collapse and the subsequent economic “recovery” in
2009, 95 percent of all wealth gains have gone to the top 1 percent in
society. A report released in November by the St. Louis Federal Reserve
showed that Americans’ personal savings in 2015 were half of what the
average was in the early 1980s.

A US Federal Reserve
report released in 2014 found that nearly six in 10 Americans had lost
all or part of their savings due to the financial impact of the 2008
economic crisis, while a 2015 study by GOBankingrates.com revealed that
the majority of Americans have less than $1,000 in savings to their
name. A report released the Pew Research firm last month revealed that
the number of middle-income homes as a portion of the population had
largely vanished in the span of a few decades.

The
figures come as the US Federal Reserve has begun raising interest rates
for banks and other financial institutions, which will likely lead to
further difficulty for individuals who rely upon credit in order to
finance their costs of living.

The expenses eating away
at the typical individual’s savings read like essential items for
living in modern society. According to Bankrate.com, the largest
expense for one-third of all Americans outside of food and shelter
consisted of utilities such as water, electricity or phone service. For
those over the age of 50, one in five cited medical bills as their
largest co

Obama’s Legacy? Dismal and Declining Labor Force Participation

I normally enjoy working for the Cato Institute since it’s a principled and effective organization.
But every so often, my job requires an unpleasant task, and watching the State-of-the-Union Address as part of Cato’s live-tweeting program counts as one my least enjoyable experiences since joining the team.

But
let’s make lemonade out of lemons by looking at lessons that can be
learned from Obama’s speech. The most jarring part of the evening was
when Obama bragged about the American economy.
Since we’re suffering through the weakest recovery since the Great Depression, that was rather bizarre.

Moreover, being proud that we’re doing better than Europe is akin to getting a participation ribbon in a soccer league for kids.

And
the chest thumping about the unemployment rate was very misplaced since
that piece of data only looks good because so many Americans have given
up on finding a job.

I’ve pontificated on that issue before and cited the Labor Department’s overall data, but let’s dig a little deeper to fully understand why Obama should have apologized rather than patted himself on the back.

Here’s the employment/population ratio for the prime, working-age population of those between 25 and 54 years of age.

As
you can see, this ratio has improved a bit over the past five years,
but it appears that there’s very little hope that the overall employment
situation will ever recover to where it was before the recession.
At least not with current policies.
Here’s another way
of looking at the same data. It’s labor force participation by age. The
lines don’t seem that far apart, but a 3-4 percentage point decline
across age groups adds up to millions of people no longer productively
employed.
Last but not least, here’s another way of approaching this data.
We have a chart from the St. Louis Federal Reserve Bank showing the number of working-age people not in the labor force.
There are two takeaways from this chart.

First, it’s clear that the problem started well before Obama.

But it’s also clear that the problem has gotten much worse during his tenure.

Wave of selling hits US markets

By Nick Beams 14 January 2016

US
stocks markets tumbled Wednesday as oil prices continued to fall and
voices in the finance industry, together with economic commentators,
warned of the potential for a major crisis.

The
sell-off was across the board, the Dow falling by 365 points, 2.21
percent, the S&P 500 by 2.50 percent and the Nasdaq down by 3.4
percent. The day opened with an uptick but large-volume selling soon set
in, the prevailing sentiment being that it was necessary to get out
without waiting to see what would happen during the rest of the day.

Commentators
said the sell-off was not just about oil, which has been touching
levels as low as $30 per barrel, but the fall in prices for all
industrial raw materials induced by the slowdown in China.
The
sharp downturn has come in the wake of a series of assessments by
banking officials that the conditions for a new financial crisis are
fast developing.

On Tuesday economists at the Royal
Bank of Scotland issued an assessment that said investors faced a
“cataclysmic year” in which stocks could fall by 20 percent and oil
could go as low as $16 per barrel.

In a note to
clients, the RBS said: “Sell everything except high quality bonds. This
is about return of capital, not return on capital. In a crowded hall,
exit doors are small.” It warned that the present situation recalled
2008 when the collapse of Lehman Brothers set off a global crisis. This
time the trigger could be China.

The bank’s credit
chief Andrew Roberts said China had set off a “major correction and it
is going to snowball” with equities and credit becoming “very
dangerous.” He warned that the London market was particularly vulnerable
to a negative shock because of the large number of commodity companies
in the UK. The prices of all industrial raw materials, not just oil, are
moving sharply down, reaching lows not seen since the immediate
aftermath of the financial crisis.

“All those people
who are long [buyers of] oil and mining companies thinking that the
dividends are safe are going to discover than they’re not at all safe,”
Roberts said.

RBS’s prediction of a sharply lower oil
price was matched by Morgan Stanley which said it could go to $20 per
barrel. Standard Charter forecast an even bigger fall, to $10. “Given
that no fundamental relationship is driving the oil market toward any
equilibrium, prices are being moved almost entirely by financial flows
caused by fluctuations in other asset prices, including the US dollar
and equity markets. We think prices could fall as low as $10 per
barrel.”

The Standard Chartered analysis points to the
development of a vicious circle: a falling oil price sends down equity
markets and then financial flow-on effects from the decline in stock
prices lead to a further drop in the price of oil.

Following the RBS call to “sell everything,” the Guardian
sought responses from a series of economists. While none went as far as
the RBS, there was a distinct lack of confidence in their replies.

Erik
Britton, director of Fathom Consulting, did not dispute that China
would have a “hard landing.” He said it was headed for just 2 percent
growth in gross domestic product, markedly less than the official
government prediction of 6.5 percent for this year.

Jonathan
Porter, the director of the National Institute for Economic and Social
Research, said he was “worried” by current events “but not yet
panicked.”

“But if the current concerns turn into a systematic meltdown on financial markets, then all bets are off,” he added.

Chris
Williamson, the chief economist at the financial data provider Markit,
said the worry was that the RBS warning could become a self-fulfilling
prophecy and if a financial market rout led to a new recession,
“policymakers are seriously lacking in tools to fight the new downturn.”

The
RBS assessment was echoed by comments on Wednesday from Albert Edwards,
strategist at the Societe Generale bank, who has long held the belief
that equity markets are considerably over-valued. He said the West was
about to be hit by a wave of deflation from emerging market economies
and central banks were not aware of what was about to hit them.

He
told an investment conference in London that developments in the global
economy would “push the US back into recession. The financial crisis
will reawaken. It will be every bit as bad as in 2008–09 and it will
turn very ugly indeed.”

The US economy was in much
worse shape than the Fed realised, with the US corporate sector being
“crushed” by the appreciation in the value of the dollar. “We have seen
massive credit expansion in the US. This is not for real economic
activity; it is borrowing to finance share buybacks,” he said.
In
an assessment of the significance of the fall in the markets, which in
the US have experienced their worst new year opening in history, an
article in the Financial Times on Monday pointed to longer-term
trends. In the wake of the financial crisis, “aggressive easing” by the
Fed and other central banks, coupled with a “mammoth spending binge” by
China, had suppressed market volatility for an extended period and
created a tide that lifted global assets prices.

“Now
that liquidity is draining away and the bill for China’s spending—in the
shape of overcapacity in some industries and high levels of
indebtedness—is coming due,” the article noted.

“The
worrying signal from the current turmoil is that the investor herd truly
has become fearful and thinks the financial system is broken. Namely,
that quantitative easing has merely papered over the cracks of global
economic imbalances, borrowed hefty investment gains from the future and
left taxpayers and company bondholders with a massive rise in
outstanding debt.”

International Monetary Fund managing
director Christine Lagarde also pointed to longer-term trends in a
speech delivered in Paris on Tuesday. She said emerging market economies
were facing a “new reality” in which their growth rates would be
significantly slowed.

“Growth rates are down, and cyclical and structural forces have undermined the traditional growth paradigm,” she said.

That
paradigm was based on boosting exports and attracting capital inflows.
On current forecasts, she said emerging economies would move towards
advanced economy incomes at less than two-thirds the pace predicted by
the IMF a decade ago. “This is cause for concern,” she said.

The
World Bank last week warned that these economies faced difficulties in
2016 after growing last year at their slowest pace since the financial
crisis of 2008.

Lagarde said the shift by the Fed
towards ending its easy monetary policies, together with the
continuation of these policies by other central banks, had the potential
to trigger exchange rate ructions.

“This volatility
could be induced not only by the divergence in monetary policies in
major advanced economies, but also by uncertainty about their overall
prospects and policy action.”
In an indication of the deepening
recessionary trends in the global economy, she noted that oil and metal
prices were down by two-thirds from their peak and were likely “to stay
low for a sustained period,” placing several developing economies “under
severe stress.”
That stress is already in evidence with major
economic contractions in Brazil and Russia, but it is not confined
there. The economic outlook for two developed commodity-exporting
countries, Australia and Canada, is also worsening.
Former US
treasury secretary Lawrence Summers added his voice to those warning
about the state of the global economy in a comment published in the Financial Times
on Monday. He said that while markets do sometimes send out false
alarms, economic and financial authorities should take notice because
“the conventional wisdom never recognises gathering storms.”
“Because
of China’s scale, its potential volatility and the limited room for
conventional monetary manoeuvres, the global risk to domestic economic
performance in the US, Europe and many emerging markets is as great as
at any time I can remember,” he wrote.
It is impossible to predict exactly how the present turmoil will play out. But two certainties have been established.
Firstly,
that the 2008 financial crisis was only the beginning of a breakdown of
the global capitalist economy, for which the ruling elites have no
economic solution. In fact, their actions have only created further
wealth for the ultra-rich, increasing social inequality, while setting
up the conditions for another financial meltdown.
And finally,
that the renewed turbulence is going to produce even deeper attacks on
the working class which, on top on those already being implemented, will
bring an upsurge in social and political struggles.

"The result: 95 percent of all income gains during the Obama presidency going to the richest 1 percent of households!"

Obama’s State of the Union address and the breakdown of American democracy

14 January 2016

“In our time, political speech
and writing are largely the defense of the indefensible. Things like
the continuance of British rule in India, the Russian purges and
deportations, the dropping of the atom bombs on Japan can indeed be
defended, but only by arguments which are too brutal for most people to
face, and which do not square with the professed aims of the political
parties. Thus political language has to consist largely of euphemism…A
mass of Latin words falls upon the facts like soft snow, blurring the
outline and covering up all the details.”

George Orwell in “Politics and the English Language,” 1946
**
The
final State of the Union address given by President Barack Obama on
Tuesday night was a litany of lies, banalities and military threats. The
speech underscored the inability of the American political
establishment to honestly address a single social question facing the
broad masses of the population.
The address was generally
praised by the media as a statement of confidence in America’s future.
In fact, it combined bluster about the strength of the US economy
absurdly at odds with economic and social reality with self-praise for
“taking out” the enemies of American imperialism and assurances of more
military havoc to come.

To
the extent that Obama touched in passing on the growth of social
inequality, the ever greater domination of the corporate-financial
elite, falling wages and rising poverty, these pervasive features of
social life in America were ascribed to cosmic forces of “change”
entirely disconnected from government policies in general and those
pursued by his administration in particular over the past seven years.

There
is an objective significance to the reduction of the State of the Union
address, an American political tradition that goes back to George
Washington, to an empty and cynical media spectacle. This process did
not begin with Obama. It has been underway for decades, in parallel with
the ever further turn of the ruling elite and both big business parties
to the right and the widening chasm between the entire political system
and the broad mass of working people.

While there was
never a golden age of American bourgeois politics, the annual State of
the Union address before a joint session of Congress once had a certain
democratic content. There was a time when the president in the form of
this speech sought to make a sober assessment of the actual state of the
nation’s economic, political and social life and the condition of its
relations with other nations. It was both a means of internal
communication within ruling circles and a report to the broader
population.

In Abraham Lincoln’s December 1862 message
to Congress, the Great Emancipator spoke in favor of abolition.
“Fellow-citizens,” he declared, “we cannot escape history… In giving
freedom to the slave we assure freedom to the free and honorable alike
in what we give and what we preserve. We shall nobly save or meanly lose
the last best hope of earth.”

In a later period,
Franklin D. Roosevelt pledged a “Second Bill of Rights” that would
include provisions ensuring “freedom from want.” (The proposal was a
dead letter almost as soon as it was made.) In 1963, John F. Kennedy
cautioned that “the mere absence of war is not peace.”

Even
some of the more reactionary presidents of an earlier period could
seriously acknowledge the existence of social problems. In 1922, Warren
G. Harding began his State of the Union address by declaring, “So many
problems are calling for solution that a recital of all of them, in the
face of the known limitations of a short session of Congress, would seem
to lack sincerity of purpose.”

The
immense growth of social inequality in parallel with the dismantling of
much of US industry, the decline in the global economic position of
American capitalism and the increasing domination of a parasitic and
quasi-criminal financial elite have made any objective accounting of the
real “state of the union” a political impossibility. All those
in attendance Tuesday night were well aware that the important policy
decisions on both the domestic and international front are made neither
by the president nor Congress, but rather by the military brass, the
intelligence establishment and Wall Street. The same conviction is
growing within broad layers of the population who are increasingly
alienated from and disgusted by the entire political and economic
set-up.

Having come to power by posing as an opponent
of the war in Iraq and the militarism of the Bush years, Obama could
hardly make an honest assessment of his foreign policy, which has added
to the war in Afghanistan new wars in Libya, Syria and Iraq, an
expansion of drone assassinations and a policy of military provocation
against Russia and China that has brought the world closer to world war
than at any time since 1945.

A major part of his
address Tuesday was given over to boasting of America’s destructive
military power and his readiness to use it. Responding to his critics
among the Republican right, he proclaimed: “The United States of America
is the most powerful nation on Earth. Period. Period. It’s not even
close. It’s not even close. It’s not even close. We spend more on our
military than the next eight nations combined. Our troops are the finest
fighting force in the history of the world. No nation attacks us
directly, or our allies, because they know that’s the path to ruin.”

Having
posed as a critic of Bush’s anti-democratic buildup of the police
powers of the state in order to get elected, Obama was in no position to
discuss his expansion and institutionalization of police state measures
such as pervasive government spying; the jailing and persecution of
whistleblowers like Julian Assange, Chelsea Manning and Edward Snowden;
the shielding of the authors and organizers of torture programs; the
militarization of the police and defense of killer cops.

Among
the most blatant lies in Obama’s speech was the assertion, “For the
past seven years, our goal has been a growing economy that works better
for everybody.” Had Obama added “who counts” to the end of this sentence
he would have been closer to the truth.

Trillions
of dollars for the banks and speculators whose recklessness,
lawlessness and greed triggered the Wall Street crash and ensuing
depression, not a single “bankster” prosecuted in seven years—that on
one side. On the other, sweeping wage reductions for autoworkers imposed
by Obama’s “Auto Task Force,” and austerity, school closures, pension
cuts and attacks on health benefits for millions of working people under
“Obamacare.”

The result: 95 percent of all income gains during the Obama presidency going to the richest 1 percent of households!

In
what has become a hallmark of American political rhetoric, Obama
concluded his speech with sheer bathos: “I see [the voice of America] in
the worker on the assembly line who clocked extra shifts to keep his
company open, and the boss who pays him higher wages instead of laying
him off… The protester determined to prove that justice matters—and the
young cop walking the beat, treating everybody with respect, doing the
brave, quiet work of keeping us safe.”

A political
system that must resort to such stupid and transparent posturing is a
political system in terminal crisis. The mounting indignation and
militancy of the masses will seek new avenues of struggle outside of and
in opposition to the entire rotten edifice of official politics.

According
to a report by the National Association of Counties issued on the eve
of the State of the Union address, of the 3,069 counties in the United
States, 93 percent are worse off than before the 2008 financial crash
according to at least one of four economic indicators: total employment,
the unemployment rate, the size of the economy and home values.

Obama’s final State of the Union: Lies, evasions and threats

By Patrick Martin 13 January 2016

The
final State of the Union speech delivered Tuesday night by President
Barack Obama was a demonstration of the incapacity of the American
political system to deal honestly or seriously with a single social
question.

Obama evaded
the real issues that affect tens of millions of working people in
America every day of their lives. He painted a ludicrous picture of
economic recovery and social progress that insulted the intelligence of
his television audience—and went unchallenged by the millionaire
politicians assembled in the chamber of the House of Representatives.

Summing
up what he called “the progress of these past seven years,” Obama gave
first place to “how we recovered from the worst economic crisis in
generations.” The so-called “recovery” has been a bonanza for corporate
profits, stock prices, and the wealth and income of the super-rich. For
the working people who are the vast majority of the population, it has
been a disaster.

By most social indices,
the American people are worse off in January 2016 than when Obama took
office seven years ago. The real wages of working people have fallen,
social services have deteriorated, pension benefits have been gutted,
and cities such as Detroit and San Bernardino have been forced into
bankruptcy.

According
to a report by the National Association of Counties issued on the eve
of the State of the Union address, of the 3,069 counties in the United
States, 93 percent are worse off than before the 2008 financial crash
according to at least one of four economic indicators: total employment,
the unemployment rate, the size of the economy and home values.

In
27 states, not a single county has recovered fully from the 2008 crash
and the deep economic slump that followed. These include such major
states as Florida, Georgia, Illinois, Massachusetts, Missouri, New
Jersey, New York and Pennsylvania.

Obama, however,
painted a picture of nearly unblemished economic advance, declaring,
“The United States of America, right now, has the strongest, most
durable economy in the world.” He boasted, “We’re in the middle of the
longest streak of private-sector job creation in history. More than 14
million new jobs; the strongest two years of job growth since the ‘90s;
an unemployment rate cut in half.”

BLOG:
AS OBAMA AND THE DEMOCRAT PARTY SABOTAGE OUR BORDERS, E-VERIFY AND
REFUSE TO ENFORCE LAWS PROHIBITING THE EMPLOYMENT OF ILLEGALS!

The
president did not acknowledge that the post-2008 “recovery” is the
weakest on record, that the vast majority of the new jobs created have
been low-wage and many of them part-time, or that the drop in the
unemployment rate is primarily due to the withdrawal of millions of
people from the work force because they lost all hope of getting a
decent-paying job.

He went on, tellingly, to
cite the auto industry as a symbol of success, declaring that it “just
had its best year ever.” This perfectly expresses the utter blindness,
not just of Obama, but of the entire political establishment. The “best
year ever” was for General Motors, Ford and Fiat-Chrysler, which enjoyed
record profits, not for the auto workers who produced those profits.

Real
wages for auto workers have dropped sharply since the Obama White House
forced through a 50 percent cut in wages for all new hires as part of
the bankruptcy reorganization of the industry in 2009. Mass discontent
among auto workers was expressed at the end of 2015 in the rejection of
contracts at Fiat-Chrysler and Nexteer, a major supplier, and in
widespread demands for strike action, smothered by Obama’s stooges in
the United Auto Workers union.

“Anyone claiming that
America’s economy is in decline is peddling fiction,” Obama concluded.
The social position of the American working class has, in fact, suffered
a dramatic decline, through the combined efforts of the corporate
bosses, the unions and the two capitalist parties, the Democrats and
Republicans.

The president conceded that economic
inequality has grown in the United States, but he described it as the
outcome of long-term trends such as globalization and automation, as
though the policies of his administration—bailouts for Wall Street,
budget cuts and wage cuts for workers—had nothing to do with it.

In
the seven years since the financial crash, brought on, as he admitted,
by “recklessness on Wall Street,” not a single banker or speculator has
been prosecuted or jailed. On the contrary, the billionaires have
greatly increased their wealth, gobbling up 95 percent of all new income
since Obama entered the White House.

Obama
listed a few other policy “successes,” claiming that “we reformed our
health care system, and reinvented our energy sector… we delivered more
care and benefits to our troops and veterans.” He was referring,
however, to a series of social disasters: the reactionary attack on
health benefits for workers and their families known as Obamacare; the
devastation of Appalachia and other energy-producing regions; and the
abuse of ex-soldiers, wounded in body and mind, by the Veterans
Administration.

Obama sought to defend the foreign
policy record of his administration from criticism, mainly from the
Republican right, where demands are being raised for military escalation
in the Middle East and stepped-up attacks on democratic rights at home
in the name of fighting “terrorism.”

While he claimed
to reject an American role as the world’s policeman, he nonetheless
boasted, “The United States of America is the most powerful nation on
Earth. Period. It’s not even close. We spend more on our military than
the next eight nations combined.”

He continued, “Our
troops are the finest fighting force in the history of the world,”
winning the bipartisan standing ovation that always accompanies any
mention of American soldiers engaged in combat overseas.

Obama
indulged in the glorification of killing that has become an essential
part of the degraded spectacle that passes for political discourse in
America. Describing the US war against the Islamic State in Iraq and
Syria, he claimed, “With nearly 10,000 air strikes, we are taking out
their leadership, their oil, their training camps, and their weapons.”

He
called on Congress to pass an Authorization for the Use of Military
Force against ISIS, but vowed to wage war with or without legislative
approval. The leaders of ISIS, he proclaimed, “will learn the same
lessons as terrorists before them. If you doubt America’s commitment—or
mine—to see that justice is done, ask Osama bin Laden. Ask the leader of
al Qaeda in Yemen, who was taken out last year…”

Then
he declared, in language that will be noted by nations all over the
world, that when it comes to waging war against potential adversaries,
“our reach has no limit.”

Obama concluded his speech
with an appeal to his Republican opponents to work with his
administration and pull back from the extreme anti-immigrant and
anti-Muslim rhetoric that has characterized the contest for the
Republican presidential nomination.

In a clear
reference to Donald Trump, he argued that “we need to reject any
politics that targets people because of race or religion. This is not a
matter of political correctness, but understanding what makes us
strong.”

Obama was making an argument, not so much that
racism and bigotry are intrinsically wrong, but that they make it more
difficult for American imperialism to maintain its dominant world role.
“When a politician insults Muslims,” he said, “it makes it harder to
achieve our goals.”

The lottery and social despair in America

9 January 2015

This mania, so generally
condemned, has never been properly studied. No one has realized that it
is the opium of the poor. Did not the lottery, the mightiest fairy in
the world, work up magical hopes? The roll of the roulette wheel that
made the gamblers glimpse masses of gold and delights did not last
longer than a lightning flash; whereas the lottery spread the
magnificent blaze of lightning over five whole days. Where is the
social force today that, for forty sous, can make you happy for five
days and bestow on you—at least in fancy—all the delights that
civilization holds?
Balzac, La Rabouilleuse, 1842

The
jackpot in the US Powerball lottery has hit $800 million, since there
were no winners in Wednesday’s drawing. In the current round, which
began on December 2, over 431 million tickets have been sold, a figure
substantially larger than America’s population.
Go into any corner
store in America and you will see workers of every age and race waiting
in line to buy lottery tickets. With the current round, the lines are
longer than ever. Americans spend over $70 billion on lottery tickets
each year. In West Virginia, America’s second-poorest state, the average
person spent $658.46 on lottery tickets last year.
Powerball
players pick six random numbers when they purchase their tickets, with a
certain percentage of sales going to the jackpot. If no winning ticket
is sold, the jackpot rolls over to the next round.
The totals for
the Mega Millions and Powerball national lotteries have been growing
every year. This year’s jackpot has eclipsed 2012’s record of $656.5
million, the $390 million payout in 2007 and the $363 million prize in
2000. The jackpots have grown in direct proportion to ticket sales.
State-run
gambling programs such as Powerball have been promoted by Democrats
and Republicans alike as a solution to state budget shortfalls, even as
the politicians slash taxes on corporations and wealthy individuals
and gut social programs. From the standpoint of government revenue,
lotteries and casinos are nothing more than a back-door regressive tax,
soaking up money from the poor in proportion to the growth of social
misery.
The boom in lotteries is global. Lottery sales grew 9.9 percent worldwide in 2014, after growing 4.9 percent in 2013.
Psychology
Professor Kate Sweeny has noted that lottery sales grow when people
feel a lack of control over their lives, particularly over their
economic condition. “That feeling of self-control is very important to
psychological well-being,” Sweeny says.
There is ample reason for
American workers to feel they have no control over their lives.
According a recent survey by Bankrate.com, more than half of Americans
do not have enough cash to cover an unexpected expense of $500 or
more—roughly the price of four name-brand tires.
Some 62 percent
of Americans have savings of less than $1,000, and 21 percent do not
have any savings at all. Most Americans are one medical emergency or
one spell of unemployment from financial ruin.
For all the talk
about “economic recovery” by the White House, the real financial state
of most American households is far worse than before the 2008 financial
crisis and recession. As of 2013, Americans were almost 40 percent
poorer than they were in 2007, according to a recent survey by the Pew
Research Center. While a large portion of the decline in household
wealth is attributable to the collapse of the housing bubble, falling
wages and chronic mass unemployment have played major roles.
The
yearly income of a typical US household dropped by a massive 12
percent, or $6,400, in the six years between 2007 and 2013, according to
the Federal Reserve’s latest survey of consumer finances. A large share
of this decline has taken place during the so-called recovery presided
over by the Obama administration.
In addition to becoming poorer,
America has become much more economically polarized. According to a
separate Pew survey, for the first time in more than four decades
“middle-income households” no longer constitute the majority of
American society. Instead, the majority of households are either low-
or high-income. Pew called its findings “a demographic shift that could
signal a tipping point” in American society.
“Is the lottery the new American dream?” asked USA Today,
commenting on this month’s Powerball jackpot. The observation is truer
than the authors intended. For American workers, achieving the
“American Dream” of a stable job and one’s own home is becoming
increasingly unrealizable.
Following more than 10 million
foreclosures during the financial crisis, America’s home ownership rate
has hit the lowest level in two decades, and for young households, the
rate of home ownership is the lowest it has been since the 1960s.
For
the tens of millions of America’s poor, and the more than 100 million
on the threshold of poverty, the dream of winning the lottery has
replaced the “American Dream” of living a decent life. A lottery ticket
is a chance to escape to a fantasy world where money is not a
constant, nagging worry, where one is not insulted and bullied at a
low-wage job by bosses whose pay is matched only by their incompetence.
The lottery is, as Balzac aptly described it, the “opium of the poor.”
Using
the same phrase to describe religion, Marx noted that the “illusory
happiness of the people” provided by the solace of religion is, in
fact, a silent protest and distorted “demand for their real happiness.”
It is the intolerable social conditions that compel masses of people
to seek consolation in a lottery ticket that will propel them into
revolutionary struggles.
Andre Damon

Survey finds a majority of Americans unable to pay for major unexpected expenses

By Nick Barrickman 9 January 2016

A
new survey put out by the personal finance management site
Bankrate.com on Wednesday found that more than half of Americans could
not weather a sudden financial crisis without having to borrow money
from friends and family or being forced to reduce the amount spent on
other items such as dining out, paying cable or cell phone bills, or
other basic features of a “middle class” lifestyle.

The survey,
conducted last month among a pool of 1,000 Americans in conjunction
with Princeton Survey Research Associates International, found that only
37 percent of those surveyed would be able to pay an emergency expense
of $1,000, such as an emergency room visit or the cost of repairing a
broken down vehicle, out of pocket.

Sixty-three percent
of those surveyed would not be able to cover such a sudden expense
without either cutting down on expenses elsewhere, borrowing or
resorting to credit. The survey found that nearly four in 10 Americans
had suffered such a financial setback in 2015.

“Without
an adequate rainy-day fund, we are all living on a very slippery
financial slope,” Gail Cunningham of the National Foundation for Credit
Counseling told Bankrate.com. “The unexpected, unplanned expense is
going to rear its ugly head and usually at the most inopportune
time…Things as small as a flat tire or one trip to the emergency room
can wreck the budgets of those who do not have an adequate amount in
their savings account,” she said.

For Americans making
less than $30,000 per year, only 23 percent would be able to cover
such a sudden expense on their own. This was contrasted by nearly 60
percent of those making over $75,000 annually who could say the same.
Nine percent making $30,000 or below stated that they did not know how
they would cover such expenses, meaning that they were one expensive
setback away from personal financial ruin.

The poll
comes amid a slew of other reports detailing an immense drop in the
living standards of a significant section of the US population, a
component of the growth of social inequality more broadly.

Since
the 2008 financial collapse and the subsequent economic “recovery” in
2009, 95 percent of all wealth gains have gone to the top 1 percent in
society. A report released in November by the St. Louis Federal Reserve
showed that Americans’ personal savings in 2015 were half of what the
average was in the early 1980s.

A US Federal Reserve
report released in 2014 found that nearly six in 10 Americans had lost
all or part of their savings due to the financial impact of the 2008
economic crisis, while a 2015 study by GOBankingrates.com revealed that
the majority of Americans have less than $1,000 in savings to their
name. A report released the Pew Research firm last month revealed that
the number of middle-income homes as a portion of the population had
largely vanished in the span of a few decades.

The
figures come as the US Federal Reserve has begun raising interest rates
for banks and other financial institutions, which will likely lead to
further difficulty for individuals who rely upon credit in order to
finance their costs of living.

The expenses eating away
at the typical individual’s savings read like essential items for
living in modern society. According to Bankrate.com, the largest
expense for one-third of all Americans outside of food and shelter
consisted of utilities such as water, electricity or phone service. For
those over the age of 50, one in five cited medical bills as their
largest co

Obama’s Legacy? Dismal and Declining Labor Force Participation

I normally enjoy working for the Cato Institute since it’s a principled and effective organization.
But every so often, my job requires an unpleasant task, and watching the State-of-the-Union Address as part of Cato’s live-tweeting program counts as one my least enjoyable experiences since joining the team.

But
let’s make lemonade out of lemons by looking at lessons that can be
learned from Obama’s speech. The most jarring part of the evening was
when Obama bragged about the American economy.
Since we’re suffering through the weakest recovery since the Great Depression, that was rather bizarre.

Moreover, being proud that we’re doing better than Europe is akin to getting a participation ribbon in a soccer league for kids.

And
the chest thumping about the unemployment rate was very misplaced since
that piece of data only looks good because so many Americans have given
up on finding a job.

I’ve pontificated on that issue before and cited the Labor Department’s overall data, but let’s dig a little deeper to fully understand why Obama should have apologized rather than patted himself on the back.

Here’s the employment/population ratio for the prime, working-age population of those between 25 and 54 years of age.

As
you can see, this ratio has improved a bit over the past five years,
but it appears that there’s very little hope that the overall employment
situation will ever recover to where it was before the recession.
At least not with current policies.
Here’s another way
of looking at the same data. It’s labor force participation by age. The
lines don’t seem that far apart, but a 3-4 percentage point decline
across age groups adds up to millions of people no longer productively
employed.
Last but not least, here’s another way of approaching this data.
We have a chart from the St. Louis Federal Reserve Bank showing the number of working-age people not in the labor force.
There are two takeaways from this chart.

First, it’s clear that the problem started well before Obama.

But it’s also clear that the problem has gotten much worse during his tenure.